In Partial Fulfillment

Of the Requirements for the Course

Operations Management and Total Quality Management

Grab Holdings Inc.

Technological Company

1 May 2020
Company Background
Grab, formerly known as GrabTaxi, is a Singapore-based startup company founded in 2012 by
Anthony Tan and Tan Hooi Ling in Malaysia. Grab is now Southeast Asia’s leading ride-hailing
platform, offering services such as ride-sharing; food delivery services; and booking services for
taxis, private cars, motorbikes, car-pooling, shuttles, and bicycles all through a single mobile
application. It was initially conceived for a college project while pursuing MBA at Harvard
Business School, and placed them in second in the 2011 Harvard Business Plan Competition.
Anthony Tan and Tan Hooi Ling took the current chaotic situation the transportation sector faced
in Southeast Asian countries particularly in Malaysia pointing out that taxi drivers were not
earning enough money which made them hate their jobs, the traffic congestion problem, the
inconvenience of getting a taxi coupled with the unpredictable waiting time, and the safety risks
regarding the security of women travelling alone. In the beginning, to introduce the Grab mobile
application to taxi drivers was a challenge because most of the drivers were not tech-savvy and
did not have the capacity to purchase smartphones, so the company had to educate their driver
partners and finance their smartphones. Tan had to go from driver to driver at places where they
hang out such as at airports, shopping malls, and gas stations, but those tables turned when the
application started gaining traction. Tan said that Grab’s increasing popularity is due to the fact
that it solves a real problem. Since it rolled out in 2012, Grab has taken its mobile-based
ride-hailing service to an exponential growth across eight countries in Southeast Asia. In 2018,
Grab acquired its rival, Uber’s entire ride-hailing service, in the region raising its status even
further from being a technological unicorn to a “decacorn” with a valuation of close to US$14
billion after securing US$1.46 billion for its ongoing Series H round of funding from SoftBank’s
Vision Fund in March of 2019.

Business Model
With a swipe of Grab’s mobile application, it allows users to hire taxis, private cars, car-pooling,
bicycle sharing, shuttle service, and bike taxis. This is the new business model as we are at the
times wherein people want everything to be easy and at the palm of their hands, this being their
smartphones. The vast majority of people want to be able to pick up their smartphones, and in a
couple of taps, have their needs and wants coming their way. In 2014, Grab introduced other
services aside from GrabTaxi, such as GrabCar, GrabBike, GrabHitch, and GrabExpress. Grab
earns by taking a commission of 16%–25% for use of their services. For instance, Grab has
around 3.5 million drivers in Malaysia and the minimum ride cost is RM5, after the 25% cut,
which is equivalent to RM1.25, the company will earn around RM4 million revenue given that
every driver gets a confirmed ride. For every booking completed by the driver, the credits
deposited by the driver will be deducted with a corresponding amount. Grab also has an
infrastructure system to maintain its driver partners. The reward system depends on reaching a
certain number of rides per month and corresponding incentives, privileges, and rewards will be
given in recognition for their services. GrabCar is the standard unlicensed car service, similar to
how Uber operates. GrabHitch is a social ride-sharing feature that can be used to book cheaper
rides that works by connecting the customer with another driver who is going in the same
direction allowing them to to get a ride from private drivers.
Grab is eyeing on penetrating the consumer service sector by providing several services within
its mobile application in its strategy to become an everyday super app. Spearheading front-line
companies in the super app model, Grab has invaded the consumer services sector by offering
hotel booking services, on-demand video platform services, ticket purchasing services, food
ordering services, grocery shopping services, besides offering financial services. This so-called
‘super app’ model is believed to have been based on the Chinese multinational conglomerates -
Alibaba’s Alipay and Tencent’s WeChat. Grab is seeking to penetrate financial services with the
2016 launch of GrabPay, a QR-based mobile payments service that is currently available in six
Southeast Asian nations, including the Philippines, which can be used to make in-store
purchases, food deliveries, and fund transfers aside from accepting payments for Grab rides.
Another service discussed in Grab’s “Grow with Grab” roadmap strategy is providing loans and
insurance services. It currently provides loans to small-medium enterprises (SMEs) and
micro-insurance for drivers in Singapore. Grab claims to have built a merchant network
comprising more than 600,000 merchants. GrabPay has extended its financial services towards
offering a ‘Pay Later’ feature, a post-paid and installment payment service allowing customers to
pay for Grab services at the end of the month without bearing an additional cost. In May 2018,
Grab launched its food delivery business, GrabFood. The company was able to grow GrabFood
exponentially after taking over UberEats’ Southeast Asia operations and it aims to dominate the
food delivery market in Southeast Asia, expecting growth over six times into a US$13 billion
market by 2022. Showing no signs of slowing down, in July 2018, with the success of its food
business, Grab launched GrabFresh, a grocery delivery service in collaboration with Happy
Fresh, an Indonesian-headquartered Southeast Asian grocery delivery provider. In April of 2019,
Grab added four new services; hotel booking, on-demand video streaming, ticket purchasing,
and trip planning; to its app in Singapore in line with its strategy.

Customers
Grab’s customer demographic focuses on the age group varying from 18 to 60 years, both male
and female, middle to moderately high-income earners with occupations such as working
professionals, unemployed, self-employed, students, and part-time workers. The company’s
vision is driving Southeast Asia forward, with technology and with a lot of love for their business
partners. Grab connects millions of consumers to millions of drivers, merchants, and businesses
taking on the largest problems that affect regions, including access inequality, outdated
infrastructure, and income disparity. Grab understands that their business partners come from
different economic realities and are focused on constantly improving their income. Grab is
empowering Southeast Asia, as one of the fastest growing regions in the world with its
resilience and positivity, by opening up income opportunities to all groups of people, regardless
of background or ability, as part of the company’s commitment to push for greater inclusivity.
With a mission to serve the Southeast Asian community by bringing people closer to what
matters to them, they have penetrated different sectors of consumer services, making Grab a
one-stop platform providing technological solutions to improve and build safer, smarter cities
helping Southeast Asians that face everyday limitations, such as traffic congestion and lack of
public infrastructure, making everyday lives better in Southeast Asia.
Industry Background
One of the many industries Grab belongs to is the transportation industry. This industry
encompasses certain services that move people or freight from one location to the other. These
certain services include public transportation services, private transportation services, and
freight transport services. In the context of Grab, this company offers transportation services via
GrabCar and GrabTaxi, and offers courier services via GrabExpress and GrabMart. To elaborate
on these services offered by Grab, GrabCar offers private car hiring services; GrabTaxi offers
online taxi booking services; GrabExpress offers same-day parcel and delivery services; and
GrabMart offers everyday-goods delivery services.

Another industry that Grab belongs to is the retail food delivery industry. This industry
encompasses certain services that deliver food from a restaurant to a customer. These certain
services typically start with an order made by a customer either through a restaurant or phone,
or through a food ordering company. In the context of Grab, this company offers retail food
delivery services via their GrabFood services. To elaborate on this service by Grab, GrabFood
offers fast and easy food delivery services from any restaurant, including most restaurants that
do not provide their own delivery services.

Another industry that Grab belongs to is the hotel industry. This industry deals with guest
accommodations and lodgings; however, this refers not only to hotels, but also to the many
other forms included in the booking of such transactions. In the context of Grab, this company
offers online hotel booking services via their GrabHotel feature. To elaborate on this service
provided by Grab, GrabHotel offers a browser of hotels and affordable deals with over two
million hotels worldwide.

Another industry that Grab belongs to is the mobile payment industry. This industry
encompasses certain services that provide smartphone/mobile money transfer services for
payments of goods or services. This industry was started in order to assist customers by
providing an easy and convenient shopping experience. In the context of Grab, this company
offers mobile money payment or money transfer services via their GrabPay feature. To
elaborate on this service provided by Grab, GrabPay is basically a mobile wallet that assists
customers in money transfers or payments.

Another industry that Grab belongs to is the finance industry. This industry encompasses firms
or institutions that provide financial assistance or financial services to customers and other
economic entities. These certain services typically start with an application for a loan and
agreeing to pay it back after a certain amount of time with interest. In the context of Grab, this
company offers financial services via their GrabFinance feature. To elaborate on this service
provided by Grab, GrabFinance allows an eligible group of Grab driver-partners to get an
affordable loan facility.
Key Competitors
Grab has several key competitors given the fact that they offer several different services,
making them part of several industries with different competition. Regarding Grab in the
transportation industry, their main competitors include Lyft, XPO Logistics, and Uber. Lyft is an
American ridesharing company based in San Francisco. Lyft develops, markets, and operates
the Lyft mobile app that offers car rides, scooters, a bicycle-sharing system, and a food
delivering service. The next competitor, XPO Logistics is an American transportation and
logistics company that helps customers move goods through supply chains. XPO Logistics’
transportation segment provides freight brokerage, last mile, less-than-truckload, full truckload,
and global forwarding services. Lastly, Uber is an American multinational ride-hailing company.
Uber offers services that include peer-to-peer ridesharing, ride service hailing, food delivery, and
a micro-mobility system with electric bikes and scooters.

Regarding Grab in the retail food delivery industry, their main competitors include DoorDash
UberEats, and GrubHub. DoorDash is a San Francisco-based on-demand prepared food
delivery service. DoorDash lets customers order food through their mobile app, lets people sign
up to become food deliverers, and lets restaurants sign up to have their food delivered to
customers. UberEats is a food delivery platform that makes ordering food from local restaurants
easy by just requesting a ride. UberEats is a mobile app that connects you with a broad range of
local restaurants and food. Lastly, GrubHub is a mobile app that connects diners with a variety
of restaurants available near them. GrabHub partners with local restaurants to offer delivery for
ones that don't normally deliver, while also offering a convenient online ordering system for the
ones that do.

Regarding Grab in the hotel industry, their main competitors include Agoda, Airbnb, and Trivago.
Agoda is headquartered in Singapore, and is a subsidiary of Booking Holdings. Agoda is
basically an online travel agency and a metasearch engine for hotels, vacation rentals, flights,
and airport transfers. Airbnb is an American company based in San Francisco, California.
Airbnb is an online marketplace for arranging or offering lodging, primarily homestays, or
tourism experiences. Lastly, Trivago is headquartered in Düsseldorf, this is where their
international operations are conducted. Trivago is basically a global hotel search platform that is
focused on reshaping the way travelers search and compare hotels, while enabling hotel
advertisers to grow their businesses by providing access to a broad audience of travelers via
their websites and apps.

Regarding Grab in the mobile payment industry, their main competitors include Google Pay,
Apple Pay, and Samsung Pay. Google Pay was developed by Google in order to power in-app
purchases and tap-to-pay purchases on mobile apps and devices, enabling users to make
payments via their gadgets. Basically, Google Pay is a digital wallet platform and an online
payment system. Apple Pay is somewhat similar to Google Pay; however, it is exclusive to
Apple gadgets only. Apple Pay is basically a mobile payment and digital wallet service that
allows users to make payments in person, in iOS apps, and on the web. Lastly, and similarly to
the former companies mentioned, Samsung Pay is a mobile payment and digital wallet service,
created by Samsung Electronics, that lets users make payments using compatible phones and
other Samsung-produced devices.

Lastly, regarding Grab in the finance industry, their main competitors include American Express,
Morgan Stanley, and Citigroup. American Express is an American multinational financial
services corporation headquartered in New York City. American Express is one of the leading
issuers of personal, small business, and corporate credit cards. Morgan Stanley is a leading
global investment bank and wealth management firm. Morgan Stanley provides services in
investment banking, securities, wealth management, and investment management. Lastly,
Citigroup is an American multinational investment bank and financial services corporation
headquartered in New York City. Citigroup, among its many other services, offers checking and
savings accounts, small business and commercial banking, and credit card issuing.

Opportunities and Challenges

Given that Grab offers several services, making them involved in several industries, they
encounter many challenges and, at the same time, have a lot of room for improvement and
growth. A few opportunities that Grab can make include developing their mobile app, expanding
to new markets, improving their customer retention and relationships, and improving their safety
features. To elaborate on the aforementioned opportunities, Grab can further develop their
mobile app and possibly add new features that help in the process of assisting customers and
improving the speed of accommodation per customer service request. Expanding to new
markets would bring more revenue to the company and at the same time assisting more people
in different locations who probably need and want the services Grab provides. Next is to
improve customer retention and relationships which can be done by giving customers rewards,
by acknowledging and also addressing customer complaints, and by improving Grab’s
promotions. Lastly, Grab can further improve their safety features and measures for both drivers
and riders. This can include improving certain features that let a customer share their GrabCar
ride details, and improving emergency features for whenever a passenger is in need of it.

A few challenges that Grab has encountered and acknowledged include challenges in growth or
expansion, challenges with local competition, challenges with safety measures, and challenges
in fare regulation. Grab’s challenges regarding their growth and expansion are affected by the
existing local competition that the locals already trust and the unfamiliar cultures in these areas.
Another is the already existing local competition in the same industry that does not exactly
provide the same services as Grab, but it does get the same job done for lower prices, such as
public transportation and other transport app services. Another challenge mentioned was the
safety measures and features of Grab wherein, in the past few years, Grab has been receiving
certain complaints regarding drivers harassing customers, and so Grab has more opportunities
on improving their safety measures and features. Lastly, a big challenge for Grab is to regulate
fares wherein customers have shown consistent complaints regarding the high-pricing of Grab’s
services compared to that of their local competitors.
SWOT Analysis
Strengths Wide Array of Services. Grab is a ride-hailing platform that offers
ride-sharing; food delivery services; booking services for taxis, private cars,
motorbikes; car-pooling, shuttle services, and bicycle-sharing through a
single mobile application. It has also invaded the consumer services sector
by offering hotel booking service, on-demand video platform, ticket
purchasing, food ordering, grocery shopping, besides offering financial
services.

Strong Brand Recognition. With the diversity of services provided, Grab

has definitely gained popularity in the Southeast Asian region and
successfully differentiated themselves from its competitors. It also has a
strong presence throughout the Southeast Asian region attributed to
powerful technology and positive customer experiences that have helped
shape and grow the business in recent years.

Easy to Use. Grab allows customers to book a taxi up to 7 days in advance

using their app and GPS services. The customer can choose the starting
point, drop off point, time, and select whether the travel is for personal or
business reasons. The customer can also leave notes to the driver to
specify what they look like and where they will be exactly so they can be
easily identified and found by their driver. Once the starting point and drop
off point have been given, the customer can continue to choose the car type
and will be able to see the flat rate fare. The app also shows how many
drivers are in the area and it will choose the closest driver to the pickup
location. The customer can choose to pay in Cash or GrabPay, which is
done at the beginning when the account was set up. From there, all the
customer has to do is wait. The driver will mark the customer as picked up
when they get there and mark as dropped off when arrived at the
destination, which can be confirmed in the app. After the ride, Grab will
automatically bill the credit card using GrabPay or in cash.

Licensed and Insured Drivers. Grab drivers are required to register as a

local business, convert their car to a commercial business, sign up in
person at the Grab office, and purchase commercial insurance to cover the
customer and their belongings in case of damage, theft, or loss. By
choosing GrabTaxi, the customer is connecting with licensed taxi drivers,
not with inexperienced drivers.

Rated Drivers. Grab allows its users to rate their drivers after riding which
means the driver is required to perform his services to the best of his
abilities or else, they would get a bad rating from their customers. This
encourages the driver partners to perform better and the customer can
 expect to be always satisfied with their riding experience with Grab because
of the rating method.

Context Aware Design. Grab’s features allow the user to see the flat rate
fee allowing the customer to choose a ride that best suits the budget. Grab
also gives real-time information of the location of the driver to inform the
rider the amount of waiting time before the nearest ride in their area
reaches them for pick-up. This allows the rider to choose the best ride that
best suits the need of the rider for the driver.

Electronic Payment System. The strength of implementing an electronic

payment system through the use of GrabPay which can be used to make
in-store purchases, food deliveries, and fund transfers aside from accepting
payments for Grab rides, is the convenience that it offers to its customers. It
makes paying less of a hassle by being able to pay for services that would
traditionally involve visiting the physical branch or use cash, and offers an
update on the status of their payment.

Weaknesses Lack of Control on Service. The company has no control over the
behavior and attitude of their drivers, hence the quality of their services may
become inconsistent and dependent on the skills and behavior of their
drivers. This entails greater responsibility on the part of the driver to
represent the company and earn a good rating by performing the service as
best as one can, considering both personal and external factors, that may
cause the customer an unpleasant experience. If the driver does not exactly
please the customers in terms of personality, appearance, and
performance, it will result in an unpleasant riding experience for the
customer which affects the credibility of the company and the driver partner
as well. An example of a problem that arises from this weakness is the high
rate of driver cancellations. Another case would be if the customer is the
one that is showing rudeness. In this case, Grab’s feature of customer
rating is important to address these kinds of situations.

Dependency on Technological Developers. The company depends on

technological developers to tackle inefficiencies and glitches in its systems
that could give rise to unnecessary disputes and lower customer
satisfaction while using the mobile application. It is also dependent on
technological developers to provide technological advancements. This is a
weakness because it depends on the technological developer before it is
able to introduce innovation in their systems that can maintain its
competitive advantage or differentiate it from its competitors.
 App Aesthetics. Grab’s app aesthetic has been called unpolished and has
even been compared to Uber, in terms of the level of detail in the icons and
loading animation. Aesthetics has a subtle effect on users’ tolerance of
other shortfalls in the user experience. The aesthetic-usability effect refers
to how users are more tolerant of minor usability issues in visually
appealing interfaces. This means that when Grab’s frustrated users deal
with other in-app design problems, the subpar aesthetics can have a
multiplier effect. A cleaner and simpler interface could come into play to
show the company’s commitment to delivering quality service experiences.

Difficulty in Getting a Ride. Although Grab’s steps in booking a ride are

easy and it has a context aware design, customers are experiencing a
difficulty in getting a ride. This difficulty can be attributed to the fact that
Grab shows the drivers the destination of their customers even before
accepting the ride. This means that the driver can pick their rides, naturally
choosing rides that are located in central pick-up points over far-flung
places and longer journeys in order to maximize convenience and profits.
This creates a supply imbalance which makes it no different to a time when
there were still no ride-sharing apps. Riders in distant locations suffer from
this. If this continues, the reliability of the app decreases affecting the
demand and revenue of both Grab and its drivers.

Lack of Transparency on Surge Pricing. Grab doesn’t share how much

prices have surged, which complicates riders’ decision-making. A 1.5x
surge is drastically different from a 3x surge and will elicit a different
decision. Grab notifies the rider when the demand is high and when it
implements the surge pricing. Riders need to know how much prices have
risen in order to make informed choices about their rides, acknowledging
the multiplier effect.

Wide Variety of Services. Grab is well-known for being the largest

ride-hailing platform that offers ride-sharing, food delivery services, booking
services for taxis, private cars, motorbikes, car-pooling, shuttle services,
bicycle-sharing. However, since it has also penetrated the consumer
services sector, the company has to manage that all the service industry
sectors they penetrated must be performing well while for those sectors
they penetrated earlier, they must maintain and improve those operations
especially with the growing competition.

Opportunities Technological Advancement. In order for Grab to maintain a competitive

advantage, Grab must continue to develop its current technological
systems and introduce new features, lessen the glitches and bugs, and
 improve problematic systems that will address problems in the service,
such as increasing the speed of accommodation or locating drives. By
lessening these glitches, and introducing innovation to their current
technology, the company can increase its reliability.

Growing Consumer Reliance on Technology. Grab can use this trend of

growing consumer reliance in technology to penetrate the consumer
services sector that would normally require people-to-people interaction to
perform those services. However, as these services continue to become
digitized, Grab can take advantage of the growing acceptance and reliance
of people to digitize those kinds of transactions and introduce technological
innovations for those sectors that will assist customers and make their daily
activities easier to do, and at the same time, making Grab the go-to mobile
app for most needed services.

Corporate Social Responsibility. With the growing environmental

awareness and importance of corporate ethical practices, customers are
likely to support a company that cares about the environment and the
ethical values it embodies. Grab can further strengthen its brand with its
mission of driving Southeast Asia forward by helping low-skilled workers
earn income and improve their lives.

Improve Brand Recall. Being on top of the minds of customers when they
think of a super app is important. Grab can do this by improving their
marketing strategy to embed into the minds of their customers that when it
comes to the kind of service they are looking for, they would first think of
Grab. This is an important opportunity for Grab because a lot of businesses
are doing the same business model as Grab and it constantly has to
differentiate itself from its competitors to build a strong loyal following.

Threats Economic Conditions. With petroleum price hikes, tax reforms, and
LTFRB employing ordinances to reduce the multiplier effect on surge
pricing, Grab is also asking for a price hike to counter these economic
factors that are reducing the profit and revenue of both the company and
their driver partners.

Threat of New Entrants and Intensity of Rivalry. With Grab entering new
service sectors, the company will gain new competition; however, with
entrepreneurs recognizing the profitability of Grab’s business model, there
will be new businesses and rival mobile applications that will try to compete
with the outstanding technology of Grab. With this it is important that they
invest in research and development to constantly innovate its technology,
 providing premium service with ethical values that appeals to consumers,
as well as having loyalty programs to maintain its loyal customers. Many
other companies have introduced the same type of booking style through
mobile applications and are penetrating the market using a low cost
strategy attracting customers with relatively lower ride rates.

Bargaining Power of Suppliers. Grab’s weakness is its strong reliance on

technological developers, such as software and hardware developers, that
are perceived to be its suppliers of upgrading its systems to fix bugs,
improve the speed and functionality of the application, and address
glitches. It can give developers a say to bargain and demand from Grab,
but because of the brand’s strength, Grab can be used by the developer as
a leverage to rise in the technological developer market.

Threat of Substitute Products. The threat of substitute products can be

mainly attributed to the consumers shuffling between different
transportation applications to monitor the price of the rides to the same
place and book the cheapest price offered. The threat of substitute products
will come from Grab failing to provide technological and branding
innovations to maintain its competitive advantage that will allow competitors
to provide substitute products with pricing strategies.

Bargaining Power of Consumers. The customer bargaining power is also

related with customers looking for the cheapest price offered by different
transportation companies.

PESTLE Analysis
Political Political Regulations for Designation of Drivers. Grab currently operates
in Southeast Asian countries where political regulations differ, especially
when it comes to the “delivery-partner” (e.g., GrabDrivers) requirements.
The enforced laws, particularly those related to business determine the
extent of movement/operations and prohibitions. Every country has its own
regulations and limitations regarding the application and approval process
of the potential drivers of Grab to be designated as contractors and overall
business operations.

Political Stability. The political environment influences the flow of Grab’s

operations, wherein uncertainty in state of affairs causes constant
adjustment in response to frequent changes in the market environment.
 Taxation. The rate of taxation of a certain country/state affects the profit
maximization of Grab. A high rate would hinder profit maximization and
increase tax expenses, thereby modifying the financial position of Grab.

Economic Dynamic Pricing Model. Similar with its competitors, Grab utilizes the
dynamic pricing strategy which involves setting flexible prices for services
based on current market demands. In this case, prices change depending
on how much the customer is willing to pay at a specific time and place.
This is also called surge pricing which Grab is infamously known for,
especially during rush hour windows.

Monopoly/Monopolistic Competition. Although Grab is not the first

entrant to the market, it had established its position, particularly in
Southeast Asia. For instance, Grab Philippines had become the lone
ride-hailing company in the country after it had acquired Uber - a US-based
company that entered the market around the same time as Grab. The
company had monopolized the market for e-hailing rides; therefore, it
acquired control over prices, as shown in the excessive charging of rides.

GDP Growth. The rate of growth in the countries where Grab operates will
influence its expected and estimated growth in the future based on the
specific economic climate of each country. Hence, the large possibility of a
recession in an economy will directly impact Grab and its operations.

Social Population Demographics. The demographics of a country’s population

determines the potential market of the company. This can impact marketing
methods deployed by the company, in which it would need to adjust its
offered products and services to the specific demographics of that country.

Class Distribution. The ratio of the lower class and upper class identifies
the purchasing power of the customers. For instance, a country with a
larger ratio of working class to upper class would unlikely avail of premium
services and would rather spend their money for affordable and reasonable
prices in exchange for regular services.

Multinational Operations. Grab operates multinationally in various Asian

countries, where it competes with US-based ride-hailing companies.
Operating internationally provides opportunities for Grab to outsource,
attract investors, and penetrate new markets, possibly outside of Asia.
Technological Increasing Globalization and Technological Innovations. The increase
in globalization encourages technological developments in which Grab
continues to adapt and innovate to new technologies to be able to compete
with other competitors to acquire competitive advantage and to increase
trade exchanges. This also assists economic outputs through more efficient
processes through the use of modern technology and social media
platforms for improved interconnectivity.

Research and Development. Technology provides the potential in the

increase or decrease of generated profits by the company. With
technological advancements comes additional costs and expenses for the
company. If the profits generated by Grab are moderately-high or high, the
amount could be reinvested into research and development wherein future
technological innovations are prepared for and allocated with a budget. As a
result, sustainable profits will be ensured and continuously raise the level of
profits over time.

Improved Mobile Application Performance. As with other mobile apps,

the Grab mobile app experiences its own glitches and system downtime
that affects price computation for rides; therefore, technology can be used
to improve the performance and constantly update the mobile app to avoid
inconvenience for both the drivers and the customers, such as the
development of a “safety center” to facilitate the safety of its users.

Legal Lawsuits. In recent years, Grab has faced numerous lawsuits, one of which
is the violation in pricing and driver cancellation rates which resulted in a
fine of almost P17 million in the Philippines. Grab should adhere to the laws
and regulations of a certain country and government to prevent numerous
lawsuits that do not only damage the reputation (e.i., public relations), but
also increase unnecessary expenses.

Health and Safety Laws. The laws that ensure the safety and welfare of
employees is crucial for a company like Grab where the operations are
centered on the drivers and its administrative employees. This also includes
the benefits received by the employees as they have labor rights. Similarly,
laws are placed for the customers’ welfare by meeting a certain level of
quality and fair pricing to satisfy and protect the customers.

Proper Registration. Grab has numerous employees across countries that

it operates in, therefore its operations must be properly registered, including
the correct number and name of employees/drivers. This also avoids legal
 disputes that may threaten the dismissal of the license to operate.

Environmental Pollution/Environmental Damage. Grab is primarily a ride-hailing

company wherein its operations are largely based on vehicles. Such
vehicles require gasoline or fuel to operate in which emissions are
unavoidable. Thus, the continuous air pollution produced by dense numbers
of vehicles on the road can cause environmental damage. The company
may be required by the government to manage their environmental habits,
depending on the type and location of government.

Weather Conditions. The constant changing of weather conditions directly

affects the operations of Grab, in which rainy and stormy seasons decrease
the availability of drivers and increase potential riders/customers.
Additionally, poor weather conditions also compromises the safety of both
the drivers and the customers. Hence, weather conditions impact the ability
of Grab in transportation, including food and parcel delivery operations.

Eco-Friendly Operations. Grab has opportunities to switch to sustainable

options and environmental friendly alternatives, however it may be
expensive, but it will decrease environmental damage, and promote
sustainability and corporate social responsibility of the company.

Gather additional data on Grab’s customers and driver partners. Can you say that Grab is
a quality company? What quality principles has Grab practiced? Provide justifications.

Customer Focus, Leadership, Beneficial Supplier Relationships, Process Approach, and

Continuous Improvement

Grab, formerly known as GrabTaxi, started as a booking request within a certain radius to
partner taxi drivers to customers; therefore, Grab had only one direct income source at that
time: their passengers. In line with this, Grab is able to practice its customer focus principle by
ensuring the safety of passengers by providing the driver’s name, plate number, photograph,
and phone number. After the ride, the passenger can rate their experience with a five-star rating
system and a feedback system for future passengers to see the driver’s performance. Later on,
Grab expanded its services into private cars, food delivery, carpool, package delivery, finance
services, and more by providing customers with a variety of services that cater to their needs.
Firstly, the process approach principle of Grab includes a five-star rating system and a feedback
system to maintain, check, and ensure the quality of services regarding accommodation, safety,
and efficiency. Secondly, Grab’s continuous approach principle enables the company to expand
into different services; therefore, from solely relying on their transportation service, Grab
ventured into the food delivery industry, hotel booking industry, mobile payment, and finance
industry, which further improved and expanded their operations. Thirdly, through the leadership
principle, Grab is able to educate their drivers on how to use the GrabDriver application and
Waze or Google Maps as a supporting application for their pick-up and drop-off of passengers
and delivery of food and other products. The company shows drivers the data of their quota for
a fair and systemized process as per the company’s goals. Lastly, the beneficial supplier
relationships principle involves the provision of smartphones for the drivers so that they can
perform the services efficiently and effectively. Additionally, Grab ensures that the drivers will get
80% of the total quota and if they go over the quota, they will receive bonuses. Grab also
provides promos and discounts to its partners. For instance, using GrabPoints instead of
tangible money for food products served. However, the overall beneficial supplier relationship is
the source of additional steady income, which is provided by Grab to cater the customers’
needs, such as food deliveries, and parcel or document deliveries. Nevertheless, Grab
Philippines and other countries have experienced backlash from customers and drivers alike
mainly due to its so-called “monopolistic behavior”, such as the excessive charging of rides
during rush hours. The customers would rather use other means of transportation rather than
paying a hefty amount. Grab addressed this by lowering the price surge but complaints from the
drivers soon arise because lower prices mean lower income for them. So as of now, Grab is
cooperating with the The Land Transportation Franchising and Regulatory Board (LTFRB) to reach
an agreement where both parties can mutually benefit from.

If you were to adopt a quality strategy for Grab, what would it be? Can you identify 3
quality management systems or techniques that would have the greatest impact to its
customers and partners? Explain how you would put this to action.

Grab can adopt a Total Quality Management System as a high-level quality strategy because,
as a multi-industry service provider, Grab needs quality in all of its sectors in order to increase
their reliability and become the super app, providing a one-stop platform for everything without
one of those industry sectors failing to live up to the expectations of their customers. There has
to be a total, organization-wide effort to install and make quality a part of the company’s culture
and where employees continuously improve their ability to provide services that customers find
of particular value. Total Quality Management System is the approach towards long-term
customer satisfaction.

Benchmarking. Benchmarking is defined as the practice of comparing business processes and

performance metrics to a standard. The main point of benchmarking is to identify internal
opportunities for improvement. Benchmarking involves studying the superior performance of
external organizations, either companies within the same industry or from another industry, and
studying the process behind the superior performance, assessing how it was able to carry out
those processes and comparing them to how the company currently operates. The information
gathered on the study of the best practices are implemented to see significant improvements to
the current processes undertaken by the company. Benchmarking is not only limited to
assessing external companies but also internally which is called internal benchmarking, and it
happens when there are departments within the company that are excelling over the others, and
those best practices can be adopted by other departments which benefits the organization as a
whole. Benchmarking could have an impact on Grab and its partners because it can improve
how it operates under various industry sectors by comparing what are the best practices that
their competitors have or the reason why customers would prefer their competitor’s service
more than theirs. Other similar online businesses who have entered Grab’s particular industry
sector earlier than them can be the subject of their benchmarking. For instance, in the food
delivery sector, FoodPanda has been operating since 2014 in the Philippines compared to
GrabFood which is a relatively new player in the food delivery scene, being launched only in
2018. One of the factors people still consider FoodPanda over GrabFood is the pricings.
FoodPanda offers lower prices for the same amount of food, compared to GrabFood’s Php49
delivery charge which is reasonable because it delivers faster. Nonetheless, Grab has divided
focus on various service sectors compared to FoodPanda’s undivided attention to online food
delivery services. Grab can benchmark some of FoodPanda’s best practices with its seniority in
the Philippine market. One of the most important factors to consider in benchmarking is
assessing what aspect of Grab’s internal operations, services, and products have to be
improved. For instance, since one of Grab’s weaknesses is its strong reliance on technological
developers, it can focus on benchmarking the best practices of external companies on
decreasing their reliance on these technological developers and diminish this weakness.
Another important step in benchmarking is identifying the organizations that the company will
compare itself to. The company must consider comparing itself to the best in the industry, and
also to its rival companies. It could also pay attention to companies outside the industry that was
able to address its dependence on technological developers, but it would be better to stick with
comparing the company to those in the same industry so that it would be easier to implement
those changes within the same context as the company. For instance, if Grab were to
benchmark a video game streaming service company that was able to address the same
internal problem, the company might find it difficult to implement those changes because of the
different service context. Some of the benefits of comparing like processes is that they have
similar regulatory issues which means it is easier to implement because the company is already
familiar with the regulatory issues regarding those processes. Another benefit is that the
company gets to know the competition better which can help the organization create a better
strategy or introduce innovations which can be an advantage. Benchmarking is one the best
techniques Grab can do because given that Grab has branched from being a ride-hailing
platform to being a super app that penetrates various service sectors, the focus will be divided
into different sectors and benchmarking competition in those different sectors would help the
company be successful in those different endeavors.

Statistical Thinking in Line with Inspection. It is a principle of learning and action based on
the following principles that all work occurs in a system of interconnected processes, variation
exists in all processes, and understanding and reducing variation are keys to success.
Essentially, statistical thinking is using statistical methods and control charts to tell when to take
corrective action driving process improvement. Statistical thinking will help Grab identify, based
on statistical data and methods, the pitfalls and causes of variations in the process. For
instance, one of the basic problems causing variations in the process is the difficulty of finding
nearby Grab drivers and getting a ride which can cause a decrease in the number of people
using the app. Grab can measure the amount of time it takes for customers to find a nearby
Grab driver or get a ride with respect to their locations and their destinations and their time of
booking the ride. Through measuring the amount of time, Grab can identify its average amount
of time it takes to get a ride. With the information gathered Grab can implement the necessary
actions it could take to address the average amount of time and also why customers are not
using the app as much as before. The goal is to lessen the average amount of time so that
riders will not resort to hailing a taxi which could be done by setting a limit or creating a protocol
for Grab drivers to disperse their services based on the locations and time of booking a ride.
Grab can use it to address the shortage in prime locations and prime time slots, where and
when demand is high. One of the actions Grab has taken to address these shortages is to
penalize its drivers for cancelling bookings. Statistical thinking can be done in line with service
inspection or determining the quality standard for each area that has to be inspected. For
instance, Grab can determine the quality standards that have to be met by the driver such as
good hygiene, politeness, and safe driving. The company has to identify the statistical technique
that can be used to investigate if those standards are being met or not. For instance, using a
histogram to show the frequency of the problem is a useful graphical representation to identify
the extent to which one issue dominates operations and affects performance figures. This can
impact the organization by providing them with accurate statistical data on areas that need to be
improved. Without statistical data, the company does not have accurate means to identify the
exact variations that are occurring and will not be able to pinpoint what exactly is causing
variation. It benefits the partners and the customers as well because the company is able to
accurately identify what internal process is hindering the company from potential growth and
address the problem in order to lead to better services.

Employee Empowerment. Employee empowerment is basically giving employees a certain

autonomy and responsibility to make decisions for themselves regarding the performance of
some organizational tasks. Although Grab has no control over how its services can be
performed such as the behavior and attitude of the driver, so we have to assume that the
employee’s goal is in line with the company’s goal of offering services with a certain standard
and quality. For instance, the driver can place car accessories such as car scents or placing
alcohol in the car, which is not part of company protocol, but rather is under the driver’s control if
adding those elements will help give customers a pleasant riding experience. One of the ways
employee empowerment can be implemented by the company is having quality circles. These
are regular meetings conducted from a group of employees in order to solve common problems.
Through this meeting, Grab driver partners get to know their fellow drivers while sharing tactics
and concerns that can be addressed by the management to improve how the company helps its
employees in their operations and in their personal lives. Grab should consider training their
partners in planning, problem solving, and other practical skills that their partners can use in
their operations led by a department that facilitates these kinds of meetings in order to
effectively address the concerns of their employees. The impact of employee empowerment on
the employees and business partners is that they treat the business as their own because of the
responsibility given to them, hence they will have the initiative to perform better, but it is
important to implement this under the condition that the employees are trained and taught to
align themselves with the company’s objectives. This is good, not only for the overall
organization because of the increase in employee performance quality and profitability, but also
on the part of the employees because it increases their confidence on their skills and abilities.

Quality Management System. A quality management system is a total system for

implementing a mechanism for managing and continuously improving core processes. The
elements of a quality management system include a quality policy which is a formal document
showing commitment to quality; a quality manual which is a reference containing policies and
procedures to be followed by the company in maintaining quality; and internal audits which
serves as a review to identify if procedures are being followed. Grab can produce a quality
policy and manual for the different industry services they offer. This is in order to maintain a
certain quality to its procedures that the employees can refer to because with a document that
proves a commitment to quality and a manual containing the policies and procedures to
maintain quality, the employees will have a constant reference decreasing the confusion, and
has to abide by those procedures in the commitment to maintaining the quality. Having internal
audits or inspections will help the company assure if standards are being met. For instance,
Grab can create a quality policy and manual that driver partners must abide by in order for them
to execute their operations in line with the company’s objectives. When the occasion arises that
the driver does not know what to do, the quality manual would be the reference of the driver in
order maintaining the service quality even under those circumstances. The company does not
have control over the actions of its drivers and this is a way for the company to instill to their
drivers that these are the procedures and processes that must be complied with.

If you are part of Grab’s management, what do you think are 3 quality goals or key
performance indicators that you will set for the next 12 months? How will you measure
your attainment of these goals?

Monitoring Employees and Customers. One of the important key performance indicators of
meeting quality goals is a continued rise in positive reviews which could be attributed in the
quality of its employees - the human element that makes services a pleasant experience for
customers. Grab has to monitor their customers’ feedback because it indicates how the
company meets its quality standards from the perspective of the customers. Grab has to ensure
that the company also monitors the quality of their employees and partners by implementing a
screening and monitoring process that is fair and consistent for all; aligned with the company’s
goal of driving Southeast Asia forward by pushing for greater inclusivity, opening up income
opportunities to all groups of people, regardless of background or ability. By monitoring the
quality of its employees, Grab also monitors the quality of its services because services rely on
the skills of the person performing the services, placing greater emphasis on the human
element as the factor responsible for meeting those quality standards. Aside from that, Grab can
monitor its customers by observing the pattern of their buying behavior, such as the months
when customers are more likely to purchase more or less, and if there is an economic or social
factor driving this trend in order for the company to provide the services with more agility and
responsiveness to the needs and wants of the customers at that time. Through monitoring its
customers, the company can respond to them more effectively and it allows the company to
understand their employees, if such consumer behavior affects their productivity, thereby
decreasing or increasing the quality of their outputs, aside from other factors that directly affects
the employees. This helps the company understand how it can help their employees fulfill their
tasks while fulfilling the company’s quality standards and improving how employees earn and
fulfill their daily responsibilities outside of the company. Grab can measure this by conducting
surveys monthly with their employees and customers to see trends affected by seasons, the
economy, society and others. This can affect the company and its capacity of providing quality
service. It is aligning the customers and the employees through the use of data so employees
can provide quality service which can satisfy the customers with the understanding that there is
no consistency in the demand for a service, the productivity of employees, the capacity of
customers, and many more affected by different external factors.

Zero Driver-Caused Accidents and Offenses (Safety). Part of assuring quality ride-hailing
services, Grab’s quality goal or key performance indicator is reducing driver-caused road
incidents, such as accidents or offenses compromising the quality of the service. This is not only
limited to road safety, but also in relation to merchant partners or delivery partners, reducing the
cases of incidents that can be prevented through meeting quality standard processes and
decreasing the error of the human element in those services through proper training and
development of important work skills. The importance of safety is in the core of service
operations, whether it means the safety of employees or customers, to ensure that the object or
organization will do only what it is meant to do and eliminating the possible risks by controlling
potential hazards that can inflict harm and it all begins with the quality of the process, the quality
of the employee, and the quality of materials or equipment used. Safety issues do not only affect
the company’s credibility, but also affects the capacity of the company to operate with
employees either injured, penalized, or suspended for incidents. On top of that are the
complaints, and the unnecessary penalty costs incurred because of the incident. Similar to how
factories would create a sign that contained the number of days since the last incident to remind
employees to be careful and keep the number of incidents to a low. Grab needs to express its
commitment to setting safety standards in its industry, aside from being a ride-hailing platform
that offers convenience and comfort. If Grab is able to achieve a zero to low number of
incidents, it would be really be beneficial, not only for the company, but also for the ride-hailing
industry because it increases the trust of the customers in the organization’s capacity to provide
quality services that caters to the safety of its passengers and it reflects how the ride hailing
industry is the safer alternative mode of public transportation. Zero incidences indicate how the
company is able to incorporate safety in its mission and the quality of drivers, merchants, or
delivery personnel the company partners with. Grab has to measure its current performance to
safety standards on which the scope of its definition has to be broadened by considering all the
accidents and offenses made by Grab partners, either reported or unreported, that resulted in
injuries, damage to public or private property, or harassment. Grab can also conduct a
comparison of its safety standards with other modes of public transportation, particularly on
taxis and similar services. Grab can launch a feature within its application that can report
incidents that need the assistance of law enforcement authorities to properly address the issue,
placing customer and driver safety as one of its top priorities. Through the use of statistical tools
such as histograms or statistical process control charts which are tools in Total Quality
Management to identify problems by showing the frequency of incidents, Grab can measure the
frequency over a period of time and identifying the cause by observing the pattern of incidences
which could be explained by external factors, such as heavy traffic during Christmas season or
incompetent police officers penalizing Grab drivers. Grab incidents would probably be low
because of the driver rating feature of the app encouraging the driver to perform better and to
be more cautious in order to get a good rating and review from their customers.

Stronger Market Relevance. Grab also has to strengthen its relevance to its target market and
target locations and one of the ways to penetrate those markets is by having a good marketing
strategy. The strong market relevance indicates that the company is able to meet the needs of
their customers and more importantly, meet quality demands in the services they offer.
Expanding its market without a strong marketing strategy that shows their relevance in the daily
lives of their customers will not be effective in penetrating markets. This is because it is
important that customers see the need for Grab in their daily lives, and so Grab must ensure
that customers encounter enough exposure online or anywhere. Grab wants to increase its
scope of operations in terms of customers and location, but they must remember that there is an
indirect proportion between the relevance of a brand and the scope of its operations. Basically,
the wider your audience or location is, then the lesser the brand’s relevance. A brand may be
insanely popular in one area, but is less popular in another area which can be due to certain
factors, such as the difference of public transportation alternatives or the economic status of the
people in the area. On the other hand, having low scope operations increases the relevance of
the brand because it is able to concentrate its operations in that area. Thereby people see the
need for the service, but this means that the brand is also missing out on other locations that
could have the potential of bringing more gains to the company. This highlights the need of the
brand to come up with a stronger marketing strategy. They have to invest in their reputation by
having low safety incidents and quality business partners or employees. This will allow their
markets to recognize their need for Grab's services. The company can begin by conducting
research on their intended audiences in different locations so as to gather data on which factors
affect Grab’s ability to penetrate the market and the potential adjustments that they can make of
the services they can deploy based on the preferences and needs of the market. They can
increase their relevance in those areas by understanding the needs of the people and devising
a marketing strategy based on the data gathered that is focused on the lifestyle and economic
status of the area. For instance, areas with high economic status citizens will probably have
high numbers of owned private vehicles, so Grab has to create a marketing strategy catered to
the area’s different conditions. Basically, a way to counteract that indirect proportion is to
support the brand’s relevance through a strong marketing strategy, to increase the brand’s
exposure and embed into the minds of its target markets that the service the customer needs
can be provided by Grab, with a swipe of its mobile application.
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